Copyright © 2011 Pearson Education, Inc. E-commerce Kenneth C. Laudon Carol Guercio Traver business. technology. society. seventh edition Copyright © 2011

Copyright © 2011 Pearson Education, Inc.

E-commerce

Kenneth C. Laudon Carol Guercio Traver

business. technology. society.

seventh edition


E-commerce: Business. Technology. Society


Chapter 7: E-commerce Marketing Communications

Copyright © 2010 Pearson Education, Inc. Slide 7-2

Chapter 7

E-commerce Marketing Communications



Video Ads: Shoot, Click, BuyClass Discussion

What advantages do video ads have over traditional banner ads?

Where do sites such as YouTube fit in to a marketing strategy featuring video ads?

What are some of the challenges and risks of placing video ads on the Web?

Do you think Internet users will ever develop “blindness” towards video ads as well?

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Marketing Communications

Two main purposes:Sales – promotional sales communications Branding – branding communications

Online marketing communicationsTakes many formsOnline ads, e-mail, public relations, Web

sites

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Online Advertising

$25 billion, 15% of all advertising Advantages:

Internet is where audience is movingAd targetingGreater opportunities for interactivity

Disadvantages:Cost versus benefitHow to adequately measure resultsSupply of good venues to display ads

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Online Advertising from 2002-2014

Figure 7.1, Page 432

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SOURCES: Based on data from eMarketer, Inc., 2010a


Forms of Online Advertisements

Display ads Rich media Video ads Search engine advertising Social network, blog, and game advertising Sponsorships Referrals (affiliate relationship marketing) E-mail marketing Online catalogs

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Display Ads Banner ads

Rectangular box linking to advertiser’s Web site IAB guidelines

e.g. Full banner is 468 x 60 pixels, 13K

Pop-up ads Appear without user calling for them Provoke negative consumer sentiment Twice as effective as normal banner ads Pop-under ads: Open beneath browser window

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Rich Media Ads

Use Flash, DHTML, Java, JavaScript About 7% of all online advertising expenditures Tend to be more about branding Boost brand awareness by 10% IAB standards limit length Interstitials Superstitials

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Video Ads Fastest growing form of online advertisement IAB standards

Linear video ad Non-linear video ad In-banner video ad In-text video ad

Ad placement Advertising networks Advertising exchanges Banner swapping

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Search Engine Advertising

Almost 50% of online ad spending in 2010 Types:

Paid inclusion or rank Inclusion in search results Sponsored link areas

Keyword advertising e.g. Google AdWords

Network keyword advertising (context advertising)

e.g. Google AdSenseSlide 7-11


Search Engine Advertising (cont’d)

Nearly ideal targeted marketing Issues:

Disclosure of paid inclusion and placement practices

Click fraud Ad nonsense

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Mobile Advertising

Half of U.S. Internet users access Internet with mobile devices

Currently small market, but fastest growing platform (35%)

Google and Apple in race to develop mobile advertising platform

AdMob, iAd

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Sponsorships and Referrals Sponsorships

Paid effort to tie advertiser’s name to particular information, event, venue in a way that reinforces brand in positive yet not overtly commercial manner

ReferralsAffiliate relationship marketing

Permits firm to put logo or banner ad on another firm’s Web site from which users of that site can click through to affiliate’s site

Slide 7-14


E-mail Marketing and the Spam Explosion

Direct e-mail marketing Low cost, primary cost is purchasing addresses

Spam: Unsolicited commercial e-mailApprox. 90% of all e-mailEfforts to control spam:

Technology (filtering software) Government regulation (CAN-SPAM and state laws) Voluntary self-regulation by industries (DMA ) Volunteer efforts

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Percentage of E-mail That Is Spam

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Figure 7.6, Page 448 SOURCE: Symantec MessageLabs, 2010


Online Catalogs

Equivalent of paper-based catalogs Graphics-intense; use increasing with increase in

broadband use Two types:

1. Full-page spreads, e.g. Landsend.com

2. Grid displays, e.g. Amazon

In general, online and offline catalogs complement each other

Slide 7-17


Social Marketing

“Many-to-many” model Uses digitally enabled networks to spread ads

Blog advertising Online ads related to content of blogs

Social network advertising: Ads on MySpace, Facebook, YouTube, etc.

Game advertising: Downloadable “advergames” Placing brand-name products within games

Slide 7-18


Insight on Society

Marketing to Children of the Web in the Age of Social Networks

Class Discussion

Why is online marketing to children a controversial practice?

What is the Children’s Online Privacy Protection Act (COPPA) and how does it protect the privacy of children?

How do companies verify the age of online users? Should companies be allowed to target marketing

efforts to children under the age of 13?

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Behavioral Targeting Interest-based advertising Data aggregators develop profiles

Search engine queries Online browsing history Offline data (income, education, etc.)

Information sold to 3rd party advertisers, who deliver ads based on profile

Ad exchanges Privacy concerns Consumer resistance

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Mixing Offline and Online Marketing Communications

Most successful marketing campaigns incorporate both online and offline tactics

Offline marketingDrive traffic to Web sites Increase awareness and build brand equity

Consumer behavior increasingly multi-channel60% consumers research online before buying

offline

Slide 7-21


Insight on Business

Are the Very Rich Different From You and Me?

Class Discussion

Why have online luxury retailers had a difficult time translating their brands and the look and feel of luxury shops into Web sites?

Why did Neiman Marcus’ first effort fail? Why did Tiffany’s first effort fail? Visit the Armani Web site. What do you find there?

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Online Marketing Metrics: Lexicon Measuring audience size or market share

Impressions Click-through rate (CTR) View-through rate (VTR) Hits Page views Stickiness (duration) Unique visitors Loyalty Reach Recency

Slide 7-23


Online Marketing Metrics (cont’d)

Conversion of visitor to customer Acquisition rate Conversion rate Browse-to-buy-ratio View-to-cart ratio Cart conversion rate Checkout conversion rate Abandonment rate Retention rate Attrition rate

E-mail metrics Open rate Delivery rate Click-through rate

(e-mail) Bounce-back rate

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An Online Consumer Purchasing Model


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How Well Does Online Advertising Work?

Ultimately measured by ROI on ad campaign Highest click-through rates: Search engine ads,

Permission e-mail campaigns Rich media, video interaction rates high Online channels compare favorably with traditional Most powerful marketing campaigns use multiple

channels, including online, catalog, TV, radio, newspapers, stores

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Comparative Returns on Investment


Slide 7-27

SOURCES: Based on data from eMarketer, Inc. 2010b, Direct Marketing Association (DMA), 2009.


The Costs of Online Advertising

Pricing models Barter Cost per thousand (CPM) Cost per click (CPC) Cost per action (CPA)

Online revenues only Sales can be directly correlated

Both online/offline revenues Offline purchases cannot always be directly related to online

campaign

In general, online marketing more expensive on CPM basis, but more effective

Slide 7-28


Web Site Activity Analysis


Slide 7-29


Insight on Technology

It’s 10 P.M. Do You Know Who Is On Your Web Site?

Class Discussion

What are some of the services offered by Adobe’s SiteCatalyst?

Why would you as a webmaster be interested in these services?

Why is site analysis and customer tracking so important to online marketing?

How did National Geographic use SiteCatalyst to its benefit?

Slide 7-30


The Web Site as a Marketing Communications Tool

Web site as extended online advertisement

Domain name: An important role

Search engine optimization: Search engines registrationKeywords in Web site descriptionMetatag and page title keywordsLinks to other sites

Slide 7-31


Web Site Functionality

Main factors in effectiveness of interface Utility Ease of use

Top factors in credibility of Web sites: Design look Information design/structure Information focus

Organization is important for first-time users, but declines in importance Information content becomes major factor attracting

further visits

Slide 7-32


Factors in the Credibility of Web Sites


Slide 7-33

SOURCE: Based on data from Fogg, et al, 2003.


Table 7.9, Page 481

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Copyright © 2011 Pearson Education, Inc. E-commerce Kenneth C. Laudon Carol Guercio Traver business. technology. society. seventh edition Copyright © 2011